Home Insurance, also called Home Loan insurance, is a policy given by every financial institution in which the lender will square off the remaining home loan amount of the borrower with the lender or bank if there is a condition of sudden accidents which may include the death of the borrower.
The Home Loan Insurance term is usually coterminous with the Home Loan term. By taking the Home Loan Insurance, the borrower is reassured that their family will not be coerced into repayment of the home loan or vacate the premises even after their death. This article will lay down the eligibility criteria for home insurance while highlighting its scope & benefits!
Home insurance can cover various financial liabilities arising from damage to your home or other valuable possessions. For instance – damage to expensive assets in the home such as jewelry, antiques, devices, etc. Loss of any possessions within the home due to theft or robbery. Damage to the home arising from a fire, flood, etc. The list is not exhaustive. The insurance payouts in the event of any of the above-listed events will provide immense relief to you and your family.
Eligibility Criteria To Buy Home Insurance Policy
Home loan insurance eligibility varies according to the policy of different companies. However, there are a few general criteria which we’ve mentioned below:
- Who can buy a home insurance plan?
- Homeowners: If you are a homeowner, you can buy home insurance for your property.
- Individuals renting homes: If you are living on rent, you can buy home insurance to secure your valuable possessions contained within the home.
- Societies: Any authorized member of a cooperative community can purchase home insurance in the name of the society, including common areas.
- What should be the age of the homeowner? The minimum eligible age is 18 years, while the maximum age of the borrower can go up to 60 years.
- What should be the status of the house being insured? The home must not be still under construction, a Kaccha house, a plot of land, a shop, residential or office space. It needs to be a real home.
- Does homeowners’ credit history matter? Credit history and prior other claims are also evaluated as part of the application process. If a homeowner has a poor credit score, it may disqualify them from availing of home insurance, or the company may require them to pay higher premiums.
- Do the surroundings of your home matter? The geographic location of your home, including the weather conditions surrounding the property, is assessed during the process. The insurer considers proximity to the forest or sea.
- Do existing conditions of your home play any role? The status quo of your home, such as the maintenance, is considered for home insurance. The age of the house, along with the state of the walls, kitchen, electrical systems, etc., are inspected before home insurance is finalized.
Are There Any Benefits of Taking A Home Loan Insurance?
- Home loan insurance gives a fixed/floating amount compensation which can be further utilized to repay the outstanding home loan.
- The borrower receives the tax benefits under Section 80C & 80D of the IT Act.
- Medical conditions such as disability or acute diseases can also be covered in the home loan insurance plan simply by paying an extra premium.
- The borrower can conveniently reimburse the premium, which may be a single or whole payment premium or the insurance amount that can be settled in the total loan amount and can be paid yearly.
- In the case of joint home loan insurance, single home loan insurance covers all the borrowers.
- Borrowers choose to switch insurance premiums into the amount added to the home loan EMIs.
As a new homeowner, you must look up home insurance policies online and compare them before buying one. Home insurance calculators can help you ballpark the premiums you have to pay. Insurance companies readily provide you with the eligibility criteria and other information for their home insurance brand. It is best to get a home insurance plan that suits your requirements before settling on one.
Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. PropertyPistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.